Types of Unemployment

‘’Unemployment refers to the situation or conditions of an economy when skilled and qualified are willing to work at the current wage rate but they couldn’t get job’’

Unemployment effects an economy is an adverse manner. Unemployment has various kinds. Each kind of unemployment is caused by different factors. Every kind of unemployment affects a particular class of people who belongs to a particular sector. Following are the various kinds of unemployment;

1. Seasonal Unemployment:

It is the kind of unemployment which is caused due to seasonal changes. Seasonal unemployment is temporary in nature. The people whose earnings are dependent upon seasons such as farmers get unemployed when their season for their product is off. The industries such as sugar industry, ice industry and tourism industry become the victim of seasonal unemployment. The laborer of the aforesaid industries gets unemployed in off season. In order to overcome seasonal unemployment the government shifts the laborers to another sector to prevent them from getting unemployed when there is off season.

2. Frictional Unemployment:

Frictional unemployment is caused due to economic instabilities and market imperfections. This kind of unemployment is also temporary in nature. This caused to due to occurrence of uncertain events in a country, which includes strikes, lock outs and protests. Frictional unemployment is also caused due to lack of mobility or inefficient allocation of factors of production. Another cause of frictional unemployment is lack of flow of information. Improper communication also effects employment adversely.

3. Technological Unemployment:

Technological unemployment is caused due to advancements and improvement is equipment and gadgets. Due to technological advancements the machines such as computers, become more sophisticated and smart that can only be operated by skilled and trained people. The persons who could not keep pace with such latest machines become the victim of technological unemployment. This is considered as permanent kind of unemployment. In order to overcome to gap which is created due to introduction of latest technology, the company or organized is required to incurred training cost for the purpose of training its personnel that how to operate the new machines, equipment and software.

4. Structural Unemployment:

Structural unemployment is caused due to structural changes in an economy. Structural changes of an economy include the changes in functions and operations of a business. This is also called as restructuring of an entity. Change in demand of commodities is also a kind of economic changes. When such economic changes occurs the people who belongs to such industry or business gets unemployed. One of the best examples of structural unemployment is the invention of automobiles. When cars were invented the demand for ferries, who shoe horses, got unemployed.

5. Cyclical or Demand Deficit Unemployment:

Cyclical or Demand deficit unemployment is caused due to trade cycle or business cycle. When recession comes after boom and demand for goods and services declines and investments decreases due to increase in rate of interest and output from industries decreases than in such circumstances of depression in an economy, unemployment occurs in the society.